Arsenal are interested in Pedro Neto, but as of yet they have not made an official offer to Wolves.
The discussions that have been going on behind the scenes have been taking place with Jorge Mendes, Neto’s agent.
Arsenal technical director Edu has a good relationship with Mendes and has already worked closely with him this summer as part of the deal that brought Fabio Vieira to the club from Porto.
Wolves do not want to sell Neto, but with Mendes having a huge influence at the Midlands club, he could yet have a major say on what happens with the winger during the final days of the transfer window.
If Wolves stand firm, however, and demand a fee in excess of £50 million for the 22-year-old, Arsenal fear they could be priced out of a move, given their hefty outlay on transfers over the past two summers.
While club sources insist they currently have no issues surrounding Financial Fair Play rules and that things are being run in line with Premier League and UEFA regulations, there is an acceptance that a deal for Neto could prove to be too expensive to pursue this summer.
Arsenal have only brought in around £20 million from sales this summer and the prospect of bringing in any substantial funds during the closing days of the window appears slim.